12 April 2002

Tescos record profit leads to mixed reaction

By Andrew Shirley

SUPERMARKET giant Tesco has announced another year of record returns, with worldwide pre-tax profits up 14.1% to £1.2bn.

The stores core UK food retailing business, the largest customer of British farmers, increased its market share to 16.7%, with a rise in sales of 9.1%.

These figures contrast starkly with the miserable incomes recorded by producers last year, reckoned to be on average only £8267. However, Helen Lo, head of marketing at the NFU, said it would be wrong to blame stores such as Tesco for the plight of farmers.

"We are not going to be drawn into an argument over retailer versus farmer. If were going to blame anybody the blame should be shared with everybody past the farm gate."

Mrs Lo believed it was important that as many inefficiencies were removed from the food chain as possible before pointing the finger at any particular link.

"Farmers need to come together to share resources, knowledge and costs."

But not everybody within the industry agreed with the NFU. Michael Hart, chairman of the Small and Family Farms Alliance, said: "You dont have to be that smart to realise supermarkets are abusing their positions, the difference between farm-gate and retail prices is bigger than ever before.

"Ive had farmers phoning up in tears because of the way supermarkets have treated them, but nobody is prepared to go public because they are so scared."

A spokesman for Tesco, however, denied that it was profiteering at the expense of producers. "Our margins are still very low, only 3p in every £.

"We cant control what the processors pay to the farmers and there are a lot of external pressures over which we have no influence." &#42